New York, N.Y. – 
At least two presidents, seven governors and several prominent mayors –
from both major parties – have established nonprofits that allow them
to raise unlimited, anonymous funds for political spending after
election day, according to a new report by the Brennan Center for
Justice at NYU School of Law.


The report, Elected Officials, Secret Cash,
is the first comprehensive analysis of a yawning gap in rules that
govern money in politics and government ethics, and poses a serious risk
of corruption. The report found that spending by nonprofits that
coordinate with elected officials after they take office goes almost
entirely unchecked, and calls for new laws to limit political funding by
officeholder-controlled nonprofits.


“In recent years, the risk of dark money in our elections has become
apparent. But we pay less attention to the politicking that happens
after election day – specifically when it comes to dark money channeled
through secretive nonprofits,” said Chisun Lee, lead
author of the report and senior counsel at the Brennan Center for
Justice. “Donors and politicians have exploited a regulatory gap that
allows them to raise political funds using nonprofits without the public
disclosure and other oversight that would apply if they were doing that
during campaign season. If we continue to let these groups operate in
secrecy, we risk further allowing shadowy funding to dominate our
politics.”


Elected Officials, Secret Cash comes
on the heels of recent reports that a nonprofit affiliated with
President Trump, America First Policies, has conducted expensive
polling  that would typically fall to the Republican National Committee –
but unlike the RNC, the nonprofit does not disclose its donors. America
First Policies had already drawn attention earlier when founder Rick
Gates pleaded guilty in Robert Mueller’s investigation of Russian
interference in the 2016 election, raising the possibility of an
unusually acute risk: secret foreign influence over U.S. politics,
channeled through secretive nonprofits.



Drawing on case studies from across the nation, Elected Officials, Secret Cash shows
how donors and politicians have used nonprofits to turn millions of
outside dollars into publicity juggernauts. Among the report’s
findings:

• Officeholder-controlled nonprofits have multiplied in recent years,
  with elected officials including Donald Trump, Bernie Sanders, and
  Barack Obama profiting politically from these organizations’ efforts.
• Officeholder-controlled nonprofits can take unlimited amounts from
  wealthy donors who, in most cases, remain anonymous to the public.
• Often these wealthy donors hold economic interests that the
  officeholder they are financing has the power to affect. In New York
  state, for example, gambling companies donated $2 million to a nonprofit
  affiliated with Governor Cuomo just before the governor declared his
  support for increasing gambling in his 2012 State of the State address. 

Finally, the report proposes a straightforward roadmap for laws that
could help bring transparency to the activity of these nonprofits:

• Identifying the entities that post the most serious risk of corruption.
  The report proposes a two-factor test that identifies the groups that
  pose the greatest risk of corruption: how closely affiliated their
  leadership is with an officeholder, and how much they spend to promote
  the officeholder’s name and image in their advertising. 
• New regulations for highest-risk nonprofits. For
  the nonprofits that meet the threshold test, the Brennan Center proposes
  two rules that are standard components of campaign finance and conflict
  of interest laws: donor disclosure and donation limits.    

Read the full report, Elected Officials, Secret Cash.

Read more about the Brennan Center’s work on Money in Politics.


To set up an interview with any of our experts, please contact Beatriz Aldereguia at (646)292-8369 or aldereguiab@brennan.law.nyu.edu.


*This press release has been updated.